Xero IPO

May 13, 2007

So, the Xero IPO is among us. It will be really interesting to see how this one goes.

On paper, it appears like they’ve valued the company just upwards of about $50m which, considering the actual income earned to date, is a bold move. The word “bubble” is having its fair share of exposure in the rumour mill.

I’ve been a user of Xero for a couple of months now, and there’s no doubt that it is a great web based accounting package. It’s Web2.0 interface is right up there with the best. But is a slick interface, and the ability to share data with your CFO, enough to prize enough market share of the MYOBs, Netsuites and Intuits of this world? Not to mention our beloved Excel spreadsheets. Xero costs $50pm for up to two users, $100pm for unlimited users. So that equates to either $600 or $1200 per year. That’s a lot of money for small businesses. As a rough comparison, MYOB or Quickbooks will set you back between $300 and $500 – one off.

I personally signed up for Xero because it can automatically pull my bank transactions from ASB – that in itself will save me an hour a month, so the $50 per month just about stacks up. Our company is also about building quality web apps, and Xero is a shining example to aspire to.

They’ve assembled a rock-star team which no doubt can deliver the goods, but rock star teams don’t come cheap. And whilst they have a couple of uber-star investors onboard, which will raise huge interest, it’s not as if they are short on cash.

I’m gonna keep a close eye on this one, and its going to be interesting to see the coverage over the next few weeks. Xero themselves acknowledge that this is indeed a “start-up” investment, and reward rarely comes without risk.

I’ll be keeping my fingers crossed for them, as I think it could be a great success story, and will likely inject further belief into the local IT community – which is always a good thing.

Up North Down South

Dan Lee is a Lancashire Lad born and bred, that's gone south and now living in Wellington, New Zealand. I am an IT professional of 10 years. I have a passion for technology, and I want it to make my life simple. Sometimes it does. So often it doesn't.
I can be contacted at easyballs @ gmail dot com.

The opinions expressed here are absolutely my own, and have got bugger all to do with any company I've worked for or with. So argue with me, not them